Yet more charges could be recommended arising from other investigations being carried out by the police.

The final decision on whether to indict Mr Olmert will be taken by Menahem Mazuz, the country's attorney general, in the next fortnight.

Mr Olmert's lawyers came out fighting arguing there was still some way to go before formal charges are laid.

"The only person authorised by the law to decide whether to indict a prime minister is the attorney general," the lawyers said in a statement.

"He has the authority and he bears the responsibility over the issue. The police recommendations are meaningless.

"It would have been appropriate for the police to completely avoid expressing its views on issues that are not under its jurisdiction and its authority."

Mr Olmert had already promised to stand down as leader of the ruling Kadima party when it holds a new leadership election later this month but the police decision casts a shadow over his premiership.

Mr Olmert is alleged to have acted inappropriately by requesting envelopes filled with dollar bills from a political supporter and to have claimed repayment for the same air ticket from multiple backers.

Both incidents took place before he became prime minister in 2006 when he was serving as the mayor of Jerusalem and as a cabinet minister under the then prime minister Ariel Sharon.

The police are some way from completing investigations into other allegations which include suggestions Mr Olmert, while serving as Jerusalem's mayor, bent planning rules in exchange for cash from friendly developers.

The number and seriousness of the investigations have raised questions about Mr Olmert's ability to continue running parallel low-level peace talks with both the Palestinians and Syrians.

While corruption allegations are not new in Israeli politics, the period since Mr Olmert came to power, following the near fatal stroke suffered by his predecessor Ariel Sharon, have seen numerous scandals.

A justice minister had to stand down after being convicted for sexual harassment, a finance minister was investigated for embezzlement and the head of the state, the president, stood down after multiple allegations of rape and inappropriate sexual behaviour.